News / Providers warn of 2016/17 deficit

Responding to the 2016/17 National tariff payment system, which was published by Monitor and NHS England today, the providers’ body welcomed the minimal changes in the tariff and the headline efficiency factor of 2%. Despite this and the additional £1.8bn of sustainability funding, the body said providers faced a tough year with stretching efficiency targets.

‘Finally, after five years of an NHS tariff with undeliverable savings assumptions, which has played a key role in driving the NHS provider sector into a near £3bn annual deficit, providers are set a realistic headline 2% efficiency factor,’ said NHS Providers chief executive Chris Hopson (right).

‘However, we should be under no illusions on how difficult the task for the provider sector in 2016/17 will be. Despite the welcome uplift to tariff prices next year and the extra £1.8bn of sustainability funding, our members tell us that, following the control totals exercise, they are still facing extremely stretching savings targets that carry significant risk. Our latest view is that there will still be a provider sector deficit of at least £500m by the end of next year.’

Monitor and NHS England published the national tariff payment system for 2016/17, apparently unchanged from the recent statutory consultation draft. The objection thresholds were not met – there were 37 objections out of 235 responses to the statutory tariff consultation – and the bodies are able to publish the tariff as planned. They said the tariff gives providers space to restore financial balance and, working with commissioners, to make long-term plans for the future of their local health economies.

A number of supporting documents have been published alongside the tariff. These include guidance on setting locally determined prices; mental health currencies and payments; the market forces factor; and the marginal rate emergency and 30-day readmission rules.